EchoStar Corp. (NASDAQ:SATS) on Thursday posted its third-quarter financial results, which fell short of street estimates.
The company reported an adjusted loss of $1.58 per share, wider than the analyst consensus estimate of a $1.21 loss.
Quarterly revenue came in at $3.61 billion, falling short of estimates of $3.75 billion and down from $3.89 billion in the same quarter last year.
Also Read: EchoStar Stock Climbs As Investors Cheer Ongoing Spectrum Sales Strategy
Adjusted OIBDA (Operating Income Before Depreciation and Amortization) totaled $230.88 million, down from $316.67 million in the prior period.
EchoStar is shutting down parts of its 5G network that no longer fit its hybrid mobile strategy, leading to a one-time, non-cash impairment charge of $16.48 billion.
Major Spectrum Transactions
EchoStar finalized two major spectrum deals in the third quarter: a $22.65 billion agreement with AT&T Inc. (NYSE:T) and a $19 billion deal with Elon Musk’s SpaceX, clearing the way for FCC approval of its 5G buildout compliance. The company also amended its pact with SpaceX to sell its unpaired AWS-3 spectrum for $2.6 billion in SpaceX stock.
EchoStar formed EchoStar Capital to invest proceeds from recent spectrum deals and drive future growth. Hamid Akhavan was named CEO of EchoStar Capital, while Charlie Ergen, EchoStar’s Chairman and Co-founder, assumed the roles of President and CEO, taking charge of the Pay-TV and Wireless units.
Segment Performance
The Wireless segment, primarily driven by Boost Mobile, reported approximately $939 million in revenue for the third quarter. This segment posted net subscriber additions of 223 thousand, with churn improving 13 basis points year over year to 2.86%. Average revenue per user (ARPU) rose 2.6% from a year earlier, with the company maintaining the highest prepaid ARPU in the industry.
The Pay-TV segment, comprising DISH TV and Sling TV, generated about $2.34 billion in revenue for the third quarter. Segment saw DISH TV churn fall to a historic third-quarter low of 1.33%, while ARPU grew 1% year over year and viewer engagement continued to rise. Sling TV added about 159 thousand subscribers during the quarter.
The Broadband and Satellite Services segment, led by the Hughes enterprise and consumer brands, generated about $346 million in third-quarter revenue. Broadband and Satellite Services reported an enterprise order backlog of $1.5 billion, driven primarily by increased market share in the aviation sector.
Cash, cash equivalents, and restricted cash totaled $2.71 billion at the end of the period.
CEO Commentary
Hamid Akhavan, CEO, EchoStar Capital, said, “EchoStar will soon be in the unique position of having substantial available capital, vastly changing its scope of opportunities. Through EchoStar Capital we will fuel EchoStar’s growth into new and complementary arenas, beyond its successful pay-TV, wireless and enterprise business units.”
Price Action: SATS shares were trading lower by 0.53% to $71.94 at last check Thursday.
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